From the issue dated February 14, 2003
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Private Universities May Profit in ChinaChina's National People's Congress approved a law in late December that gives private colleges the same privileges as publicly supported institutions, including the opportunity to make a "reasonable" profit. Exactly what a "reasonable" profit is, however, has yet to be defined.The new law, which helps spell out the role of private colleges in China's higher-education system, will increase their number, says Cheung Kwok Wah, a professor at the University of Hong Kong's Faculty of Education. A previous law had made it illegal for the colleges to make profits. Referring to the four years that it took for the new law to pass, he said, "The debate has finally come to a conclusion." The law's most important achievement, Mr. Cheung said, is that educators can now expect a reasonable return. Private institutions will be eligible for the same preferential tax exemptions, loans, and discounted land-purchase rates that public institutions get. Until now, private institutions have operated with an ambiguous status, and the government has turned a blind eye to their moneymaking operations. Fledgling privately operated institutions began opening in the 1980s and '90s, when the government started encouraging economic reforms to open up the country's markets. In 2001, 89 private institutions of higher education were qualified to issue government-approved diplomas, while 1,280 other private colleges and universities operated illegally, according to official statistics. By comparison, China has 1,000 officially accredited public universities. Education experts say the new law comes at a time when China is realizing that the government cannot continue to support all levels of education. Predictions are that the government will rely more on private educators to shoulder part of the responsibility of educating China's youth, who account for about a quarter of the country's 1.3 billion people. Wang Jialiu, vice chairman of the education committee of the National People's Congress, was quoted in China's news media as saying that the new law should "encourage individuals to devote their efforts to the educational cause and, on the other hand, prevent owners of [private] schools from making exorbitant profits." http://chronicle.com Section: International Volume 49, Issue 23, Page A41
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Copyright © 2003 by The Chronicle of Higher Education